sâmbătă, 26 noiembrie 2011

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A decision without tradeoffs...

isn't a decision.

The art of good decision making is looking forward to and celebrating the tradeoffs.

 

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vineri, 25 noiembrie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Latest Idiotic Plan: No Losses for Banks or Bondholders because "Losses Undermine Confidence"

Posted: 25 Nov 2011 03:33 PM PST

In an attempt to improve confidence, yet another hare-brained scheme was launched by France to spare bondholders any losses.

Please consider Euro zone may drop bondholder losses from ESM bailout
Euro zone states may ditch plans to impose losses on private bondholders should countries need to restructure their debt under a new bailout fund due to launch in mid-2013, four EU officials told Reuters on Friday.

Commercial banks and insurance companies are still expected to take a hit on their holdings of Greek sovereign bonds as part of the second bailout package being finalized for Athens.

But clauses relating to PSI in the statutes of the European Stability Mechanism (ESM) - the permanent facility scheduled to start operating from July 2013 - could be withdrawn, with the majority of euro zone states now opposed to them.

The concern is that forcing the private sector bondholders to take losses if a country restructures its debt is undermining confidence in euro zone sovereign bonds. If those stipulations are removed, most countries in the euro zone argue, market sentiment might improve.

"France, Italy, Spain and all the peripherals" are in favor of removing the clauses, one EU official told Reuters. "Against it are Germany, Finland and the Netherlands." Austria is also opposed, another source said.

Germany and some other member states were hoping to bring the ESM, which will have a lending capacity of 500 billion euros, into force as early as July next year, but disagreement over its structure could delay that.
That's right folks, we are going to bail out the banks and no one has to take any losses (except taxpayers of course who will "share" 100% of the risk). Otherwise there will be a "loss of confidence" in the same banks that plowed into Greek, Spanish, Irish, and Portuguese debt because supposedly there would be no losses on sovereign debt.

Now they have taken a no-loss idea that has already blown sky high, and want to expand it to the next level: "no losses on bailouts".

This plan is so stupid only government bureaucrats could dream it up.

The only true way to restore confidence is to punish banks that make stupid lending decisions. Thus, 100% of the losses should go to the bondholders, not zero percent.

Addendum:

Reader Jim writes ...
A buddy of mine tells a story about being in the Army. Each time they asked their commanding officer why they had to do the latest unpleasant assignment, he would reply "It builds character." One day a lonely voice in the back said "Sir, we have enough character already."

In that spirit let me inform the politicians "I have enough confidence already."

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List


Do It Yourself Interactive Eurozone Bank Stress Test

Posted: 25 Nov 2011 11:36 AM PST

Reuters has an interesting Interactive Eurozone Bank Stress Test

Adjust the Tier 1 Capital Ratio and Sliders for Haircuts and out pops an answer. This is what I came up with. It is hard to get the sliders to stop exactly on the spot you want.



A Political Problem?

Please consider Franco-Prussian flaw
The barriers to a proper recapitalisation of Europe's banks look political, not economic. That's the conclusion of Reuters Breakingviews' latest bank stress test, which analyses what would happen if governments have to fill the entire capital hole required to restore confidence in Europe's financial system.

The shortfall created by a tougher stress test is certainly large. Take the 90 banks that participated in the European Banking Authority's now-discredited exam in July. If banks were forced to mark their sovereign debt to market and achieve a core Tier 1 capital ratio of at least 7 percent under a stressed scenario, they would need 93 billion euros. Raise the pass mark to 9 percent, and the hole is 260 billion euros.

That's a giant leap from the gap of 2.5 billion euros identified by the EBA in July. However, when judged against the economies of the 21 countries whose banks sat the test, it's still manageable. A 93 billion euro capital injection is equivalent to only 0.7 percent of the countries' expected GDP for 2011. Even with a 9 percent pass mark, the bill is still just 2 percent of GDP.

Peripheral states would still suffer. At a 7 percent pass mark, Greek and Cypriot banks would need a combined 36 billion euros of extra capital. Footing the bill would push Greece's 2011 debt-to-GDP ratio to 171 percent, from 157 percent. Cyprus' post-recap debt would be 86 percent of GDP, 26 percentage points higher than before. But both those countries' banking systems always needed help to cope with a Greek default.

The real question is whether Spain and Italy, which face a combined bill of 22 billion euros, need bailout money as well. However, financing the recap will only add 1 percent to their respective debt-to-GDP levels.

France and Germany have recently squabbled about whether the recapitalisation of their banks should be financed by the countries themselves, or by the European Financial Stability Facility. With self-help perfectly plausible, it suggests the real problem is justifying further bank rescues to voters.
The Problem is Political

I came up with a shortfall of 557 billion Euros. I suspect the answer is a lot more, say one trillion euros (not counting real estate loans, personal debt, and corporate debt writeoffs). However, there is absolutely no political will to allow that to happen, except via extend-and-pretend.

The problem is indeed political. The bondholders (that means banks), not taxpayers need to take those losses. Politicians (led by Nicolas Sarkozy) refuse to accept that.

Yet, the market will force it one way or another. The preferred way would be for banks to take a huge up front hit, right here, right now. The slow, painful way would be to stretch this mess out for decades like Japan did.

Politicians always want to avoid up-front pain. They will opt for slow-and-painful, no matter what the amount is. However, as I have said Eventually, Will Come a Time When ....

Eventually, there will come a time when a populist office-seeker will stand before the voters, hold up a copy of the EU treaty and (correctly) declare all the "bail out" debt foisted on their country to be null and void. That person will be elected.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List


Not your grandfather’s Republican Party; President Obama and Mitt Romney are Nearly One and the Same!

Posted: 25 Nov 2011 09:31 AM PST

Not your grandfather's Republican Party

My lifelong friend and high-school classmate had an wonderful op-ed on iPolitics today. Please consider Not your grandfather's Republican Party by David Wise.
One of the most negative things to have happened to the increasingly dysfunctional political system in the United States has been the transformation of the Republican Party over the last generation into the party of fiscal deficits. At one time, the bastion of balanced budgets and no free lunches, 70% of gross public debt through the last fiscal year was accumulated under the last three Republican presidents who ran deficits twenty out of twenty years averaging 3.9% of GDP.

Having inherited a budget surplus from Bill Clinton, George W. Bush presided over a doubling in federal debt, simultaneously cutting taxes while running two wars on credit. Railing against domestic spending, the same administration implemented a large new unfunded prescription drug benefit. Yet now, as the opposition party, Republicans pontificate about the dangerous levels of gross public debt (now at 101.1% of GDP) and last summer set about playing chicken with a possible default on our financial obligations. In now trumpeting national debt as a paramount evil, the Republicans approach the debate by taking tax increases and defense spending off the table – which is somewhat like resolving to set about losing weight by eschewing dieting and exercise.

Conservatives are right to raise issues about what they see as a tendency to throw money at domestic programs, yet refuse to apply the same logic to spending on the military. In a world with no existential threat such as we faced during the Cold War and in which 85% of global defense spending is by the US and its allies, the US defense budget is higher now on a constant dollar basis than it averaged during the Cold War. There is probably no part of the Federal government that is more poorly and wastefully managed than the US weapons acquisition programs where massive cost overruns are common.

The current situation is dangerous and unsustainable. This year the US government will collect taxes equal to 14.4 of Gross Domestic Product (GDP) – the lowest level since 1950 – yet spend 25.3% of GDP. Serious people know in their hearts what has to be done. ....
Here again is the link to the entire article: Not your grandfather's Republican Party.

President Obama and Mitt Romney are Nearly One and the Same!

I do not know which candidate my friend backs, if any. It is easy enough to make a case that every candidate is flawed.

However, I am in 100% agreement with the central thesis of his article: "Serious people know in their hearts what has to be done."

To that idea, I have a few questions.

Do You Want More Bailouts? More War-Mongering? More Nation Building? More Federal Spending? More Status Quo?

Let me phrase the above in a single question: Do you want more of the same?

Polls suggest you don't. Your votes say you do. So which will it be?

If you want more of the same, then vote for President Obama. If you want more of the same you can also vote for Mitt Romney or Herman Cain.

Whether you voted Democratic or Republican in the last election, it did not matter. The non-super budget committee proves it as does Obama's carry-over of Bush's bank bailout policies.

The sad fact of the matter is a vote for Obama is a vote for Mitt Romney. Likewise, a vote for Mitt Romney is a vote for Obama.

Certainly a few details will change, and a small set of  "beneficiaries" will be different (for the one percent). However, for the average person, it simply will not matter. The average person will be ruined by the war-mongering, anti-free trade policies of all of the Republican candidates but one.

The latest Republican debate offers strong evidence of my statement.



Link if video does not play: Ron Paul Highlights in 11/22/11 Debate


Do You Want More of the Same?



As preposterous as it may have sounded at first glance, Obama and Romney are nearly One and the Same!

Neither will tackle the budget deficit. Both will keep military spending intact. Both support the "un-patriot" act.

To be fair, Romney is more likely to start a devastating trade war with China (in fact he has guaranteed it), while president Obama is more likely to waste money on social programs and big labor.

Some choice!

The simple fact of the matter is: it does not matter much if you vote for Mitt Romney or Barrack Obama. Both will destroy the country. Both support wars. Both will spend the country into the ground (but perhaps in different ways).

Regardless of who wins the Republican nomination, I will not vote for either of them. Nor will I vote for Perry, Gingrich, or Cain. I certainly will not vote for President Obama.

If you want change, and polls suggest you do, there is precisely one candidate who will give you the change this country desperately needs. That person is Ron Paul.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List


UK Banks Brace for Eurozone Break-Up; Eurogeddon and the Death of a Currency

Posted: 25 Nov 2011 03:15 AM PST

There are several good articles in The Telegraph today. Let's take a close look at two of them.

The Death of a Currency

Jeremy Warner writes Death of a currency as eurogeddon approaches
The market is starting to bet on what was previously a minority view - a complete collapse, or break-up, of the euro. Up until the past few days, it has remained just about possible to go along with the idea that ultimately Germany would bow to pressure and do whatever might be required to save the single currency.

The prevailing view was that the German Chancellor didn't really mean what she was saying, or was only saying it to placate German voters. When finally she came to peer over the precipice, she would retreat from her hard line position and compromise. Self interest alone would force Germany to act.

But there comes a point in every crisis where the consensus suddenly shatters. That's what has just occurred, and with good reason. In recent days, it has become plain as a pike staff that the lady's not for turning.

All of a sudden, the pound is the European default asset of choice.

What we are witnessing is awesome stuff – the death throes of a currency. And not just any old currency either, but what when it was launched was confidently expected to take its place alongside the dollar as one of the world's major reserve currencies. That promise today looks to be in ruins.

Contingency planning is in progress throughout Europe. From the UK Treasury on Whitehall to the architectural monstrosity of the Bundesbank in Frankfurt, everyone is desperately trying to figure out precisely how bad the consequences might be.

What they are preparing for is the biggest mass default in history. There's no orderly way of doing this. European finance and trade is too far integrated to allow for an easy unwinding of contracts. It's going to be anarchy.
UK Banks Brace for Eurozone Break-Up

Garry White quotes Andrew Bailey, a top UK regulator who says "UK banks must brace themselves for euro break-up"
Andrew Bailey, deputy head of the Prudential Business Unit at the Financial Services Authority (FSA), noted that British banks are not heavily exposed to the eurozone, but said they must prepare for some countries to exit the single currency – or a complete break up.

"We cannot be, and are not, complacent on this front," Mr Bailey said. "As you would expect, as supervisors we are very keen to see the banks plan for any disorderly consequence of the euro area crisis.

"Good risk management means planning for unlikely but severe scenarios and this means that we must not ignore the prospect of a disorderly departure of some countries from the eurozone.

"I offer no view on whether it will happen, but it must be within the realm of contingency planning," he added. Failure to plan for the exit of a country from the euro would be "unsound risk management", Mr Bailey said.

Last week, Japanese bank Nomura said a euro break-up is a "very real risk" and advised bond holders to check whether they are likely to be repaid in other, reinstated European currencies if the euro crumbles.
Disorderly Death

Read that last paragraph above closely. The death of the Euro could be very disorderly.

It would be far better for Germany and other states against ECB printing to leave rather than suffer the consequences of a breakup fueled by Greece, Spain, and Portugal leaving.

If France wants to print (Sarkozy is committed to the Euro and to printing), then France can stay in. Will Sarkozy survive the next French election?

The next election may be moot. Things are unraveling far faster than I expected. The market is going to force some major action in days, not months.

"Plan C" Germany Exits the Euro

Several times recently I have linked to a discussion by Michael Pettis and Hans-Olaf Henkel (the former head of the Federation of German Industries), regarding "Plan C" a Eurozone breakup with Germany leaving instead of Greece, Spain, and Portugal leaving.

It is well worth another look. Please see Eurozone Breakup Logistics (Never Believe Anything Until It's Officially Denied) for a lengthy discussion.

Interestingly, Hans-Olaf Henkel was an early supporter of the euro but now says "I now consider my engagement to be the biggest professional mistake I ever made."

Steen Jakobsen is still sticking with his European "bank holiday" idea detailed in Perfect Storm the Most Likely Scenario; Is Europe Set to Declare a Chapter 11 in Early 2012?

If by some miracle the can is to be kicked farther down the road, it better happen soon. Promises to agree to agree will not work. Time is up.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List


Home Prices Crash 62.5% Since September in Erdos, a Chinese "Ghost Town"

Posted: 25 Nov 2011 12:56 AM PST

Erdos is an inner-Mongolia city with rich natural resources. However, it's a ghost town with many buildings but few people. Home prices just crashed 62% in a few months.

Let's take this story starting from the beginning.

2011-07-11
China Times reports Housing bubble in Inner Mongolian city bursts
A property boom in the Chinese city of Ordos started in 2006, but became stagnant this year after banks tightened credit and coal enterprises in the region have consolidated.

Ordos, a city in central-west Inner Mongolia, has deposits of coal and oil. A recent report by China's Ministry of Housing and Urban-Rural Development showed that the GDP per capita of Ordos surpassed that of Hong Kong.

The number of the rich people with more than 100 million yuan (US$15.468 million) is over 7,000. One out of every 15 people in Ordos has more than 10 million yuan (US$1.546 million). Those who have only one million yuan (US$154,680) are considered poor.

With so much wealth floating around, housing prices have skyrocketed. According to the newspaper Southern Weekend, this third-tier Chinese city once had real estate prices that averaged 7,000 yuan (US$1,082) per square meter.

Several buildings sold recently for as high as 13,000 yuan (US$2,010) per square meter. Home prices in Erdos have climbed to over half the price in Beijing, one of China's most expensive property markets with an average of 22,914 yuan (US$3,544) per square meter.

However since February, home sales have stalled, with only around 10 percent of properties on the market being sold.

In addition, underground financing is rampant in Ordos. Every housing project has to seek funds from the private sector, which has taken a 40-50% share of the lending market.

A developer in Ordos said that some in his industry have invested all their money into real estate. Now, with new homes still being built, developers must pay their bills monthly, but since they cannot sell the properties, they are forced to continue to dump in money. Once banks refuse to offer loans, they have to borrow from the private sector, forming a vicious cycle of dependency.

Kang Bashi, the well-known ghost town in Ordos, represents the epitome of China's housing bubble.

The town, which cost 17 billion yuan (US$2.629 billion) to build, was originally intended to become a city with a population of around one million, but the number of people actually living there is less than 20,000.

Chinese media has described the town as "quite barren, with only a few vehicles passing through the multi-lane highway. Some government offices open in the daytime. Pedestrians that appear every so often look like illusive beings, dragging their heavy feet along, like a lone survivor after a catastrophic event from the movies."
2011-09-29
China Loan Shark Market Crashes; Scores of Chinese Business Owners Unable to Pay Black Market Loans Commit Suicide or Disappear
Here is an interesting email from reader "Kevin" regarding the crashing loan-shark market in China.

Hello Mish

I am a long time reader and want to bring to your attention on a new development in China: private business owners are disappearing or jumping off buildings because they can no longer pay off black market shark loans.

According to national new paper Economics Information (part of state media Xinhua), on 9/22, Hu Fulin, owner of the biggest eyeglass manufacture of the city of Wenzhou disappeared, leaving behind 2 billion RMB debt.

On 9/25, 3 more business owners in Wenzhou disappeared (owners of copper, steel and shoe manufacture).

On 9/27, owner of "Zhengdeli", a shoe manufacture jumped off of a 22 story building and killed himself.


....
2011-11-24
China Financial Daily reports Erdos "Ghost Town" property market crash, ten thousand yuan housing price drop by 70%
Living in the edge of the Ordos storm , Ordos was beset with a different version of real estate lending Wenzhou panic . For example, local " Jinxin Han Lin Yuan " project , its second-hand house prices are around 10,000 yuan , while the market price now only is 3750 yuan.
The example given is a 62.5% decline but some properties may have fallen 70%. Either way, that is one hell of a price decline since September.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List


European Bond Selloff Continues: Italy 2-Yr Yield 7.90%, Belgium 5.22%, Portugal 18.38%; Greek 1-Yr Yield 310%

Posted: 25 Nov 2011 12:17 AM PST

The European bond selloff continues unabated, once again led by surging yields on 2-Year bonds pretty much across the board, especially Italy, Belgium, and Portugal.

Italy 2-Year Government Bonds



Note: these charts are all from 3:00AM central or so.
At 5:30 AM central the two-year yield on Italy hit a whopping 5.90%

Belgium 2-Year Government Bonds



Portugal 2-Year Government Bonds




Note: these charts are all from 3:00AM central or so.
At 5:30 AM central the two-year yield on Portugal hit a whopping 18.30%
Spain 2-Year Government Bonds



Germany 2-Year Government Bonds



I failed to mention previously that the yield on Greek 1-Year bonds soared over 300% on November 23. Here is the chart.

Greek 1-Year Government Bonds



Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List


Using Emails to Build Links - Whiteboard Friday

Using Emails to Build Links - Whiteboard Friday


Using Emails to Build Links - Whiteboard Friday

Posted: 24 Nov 2011 01:07 PM PST

Posted by Kenny Martin

It's not so common to think about email marketing as a potential link building opportunity, but it's actually a wonderful tactic that you can use. Leveraging those finely crafted email lists with an SEO strategy can be highly advantageous.

In this weeks Whiteboard Friday, Rand shows off some useful and creative tips on how to utilize an email marketing strategy that will help you build links.



Video Transcription

Howdy, SEOmoz fans. Welcome to another edition of Whiteboard Friday. This is actually Thanksgiving Friday in the United States, so I hope you had a wonderful turkey day with your families. And for those of you in other countries, turkey is not the most delicious of birds, but we enjoy it. It's good. We make a little cranberry sauce. We've got a little yams and some sweet potatoes. It's great. It's lots of fun. And, of course, there's football, which is my favorite part.

All right. So in this edition of Whiteboard Friday, since it is indeed the giving of thanks, we are talking about getting thanks from your users from whom you're getting great email content by getting links from them.

Email marketing, email list building is actually a phenomenal way to get links. It's not something that many people in the SEO world think about. We've got a bunch of different strategies.

The first thing I want to talk about is building an email list itself. There are tons and tons of tips on this out there on the Web, and I don't want to pretend that I'm an expert. But what I will say is that having a subscription to an email list on a website, particularly if you are a content-based site or an ecommerce-based site, is absolutely huge. Even for those of you doing B2B direct marketing or doing affiliate sales of some kind, email list building is a wonderful way to capture consumers and potential customers, bring them into your ecosystem. Those email addresses are incredibly valuable if you can build up a good relationship over time.

A few recommendations. You've often got something on the side of your website that lets people subscribe with email. If you blow it up, it looks something like this. You've got your name, you've got your email, you have a subscribe button, and that's great. What I would really recommend is to ask for very, very little in these boxes. If you have a subscription that pops over, please ask for as little as possible. But do me one favor - ask for the name.

The reason the name is so important is because in email marketing and list building, as email marketers know, getting the open rate up is critical. Getting people to click on that email, open it up and click through. Having their name means that you can do much more with personalization of those emails. Not having their name means it's very frustrating. It's hard to write that first intro sentence or paragraph, whatever, if you don't have their name, and it's often hard to get them to click through as well. I'm sure all of you get email spam like this that says, "Hi, blogger from so- and-so." "Hi, dear Rand@SEOmoz." I'm sort of like, "Yeah, you have no idea who I am and you couldn't care less. You're just trying to get me to take some action." But if it says, "Hey there, Rand" or, "Rand, we've got something you might like," that is much more likely to get an open. It can be customized, etc.

Make sure that you have something of great value that you are delivering over email, and then make sure that you're not just promising it, but you are actually delivering on that promise.

Indicate the frequency that you are going to have. So in here, I might say something like "once per week." So you will get a weekly email, or you'll get a daily email, or you'll get a monthly email. Don't be coy about how often you are going to send it. Try not to be too out-of-cycle with those emails. It's really that kind of thing. I get a weekly email and then suddenly I get two in two days, and I think, "It's time to unsubscribe from this list." Try not to do that.

Also, watch and manage your inactives very, very carefully. If you see people who consistently have never clicked, never opened, never taken any action, you might actually want to remove them from your email list. I know that sounds crazy, because you're thinking, "Wait, but I want a bigger email list. I want to grow it over time." I know. I want that too. But the problem is that email management services, MailChimp for example, or Bronto, which is what we use here at SEOmoz, they monitor very closely that usage rate. A lot of those people who aren't taking any action but haven't unsubscribed are reporting you for spam. They're clicking that spam button in Gmail. They're clicking the report spam button in Hotmail. They're clicking the spam button in Outlook. That's a huge problem, because the percentage of people who report you for spam is a metric that those providers use to determine deliverability rates. They might actually kick you off their service. You are going to have worse deliverability problems over the long run. So try and weed those people out. Anyone who you think might not be engaged or active or interested anymore, you've changed the focus of your business or of your email list, get them out of that funnel so you are not clouding up and murky-ing the waters. Spam is a big, big problem in email deliverability, and you don't want to end up in that group.

And finally, last but not least of the tips here, A/B and multivariate test how this piece performs. You want to be trying different things. A different headline, a different way of capturing it, different form placement, using the overlay, using something where they only see when they scroll to the bottom, whatever it is, so that you can get the maximum percent of people who are visiting your pages taking that email action, particularly if email is a big way that you drive your business.

Now, you've done all these things. You've built an extraordinary list. I'm very proud of you. Your marketing team loves you. Now you're thinking, "I want to leverage this for some SEO. I want some links. Give me some links, baby!" I'm going to give you some links.

There are some link building tactics that you can use that are going to drive value back to your site, maybe some of them direct links, good anchor text pointing to the right pages, some of them brand links that are just pointing to your home page, some of them random distribution, and some of them, of course, are going to be social shares, which might not be counted as links, might have some impact on rankings. We're not really sure. Probably as a second order effect at worst.

I'll talk about the first one here. Share embeddable content. You're very aware of the power of things like badges and infographics or tools, what have you, stuff that can sit on someone else's site and point back to you. Share that stuff over your email list. If you have a great badge for people and you want to say, "Hey, you've contributed a design to our site," "You've been a member here for a year now," "You've filled out your profile completely," "You've bought three things from us," "Here's a way to say that you like our brand. Here's something to encourage you." And the people who are passionate about your brand and about your community they're going to embed those things on their sites. Wonderful. Just great for your SEO. And, of course, you get to control the anchor text and where that points. Another great thing.

This sounds a little complicated, but it is totally brilliant. You've got this big list, and the list looks something like, here's email@domain.com. This domain.com is an absolutely incredible piece of information that so many people under-appreciate. Domain.com is often Gmail. It's often Hotmail. Scrub those. You don't care about those. What you care about are all the rest of those domains. Those are all websites where people from those sites, particularly if you're in the B2B field or serving B2B type customers, where these people own those sites, are marketers on those sites, are involved with those sites somehow, and you can reach out to them by filtering the domain names you care about, using something like the Linkscape API or the Majestic SEO API if you want to get fancy, and seeing, "Hey, do these sites already link to me?" and then ordering by, "Oh, you know what? I'm going to take these domain names and in Excel I'm going to order by domain authority, and I'm going to grab the ones that are highest domain authority that aren't linking to me, where I think I've got a chance of outreach." And by the way, I can do that outreach directly because I know somebody there. Somebody there has subscribed to my email list, so they care about my business. That makes that outreach, those business development possibilities much, much more accessible. For those of you who are looking for where should I do email outreach, where is an easy target, it's this. Come on, you can't get any easier. It's wonderful.

Number three. Encourage your users through email, particularly if you have something like a profile that they are creating on the site or a user page, encourage them to fill those out completely. The reason that I love filling them out completely is because when people invest effort in them, they will often link to them. If you provide any value back on those profile pages to the people who are creating stuff on there, whether it's, "This is your design portfolio," "Here's your Amazon Wish List," "Here are the things that you've customized on the site so far," whatever it is that you've done, you want those users to fill out the profiles because they will have a strong potential to link to their profiles, and once they do, you get SEO value from that "rising tide lifting all ships" phenomenon.

The next one; consider sending some individual emails to the users who get activity and engagement on your site. The simplest form of this is blog comments. Someone subscribed to your email list, they accept email privileges when they register with your site, someone replied to their comment. Someone mentioned them somewhere. They received an action on their page. 100 people visited their profile page. 100 people checked out a product they customized. 100 people looked at their wish list. Imagine if you were ThinkGeek and you get, "Hey, someone looked at your ThinkGeek wish list today." Just a little friendly notification. This is a way to bring people back to their site and for them to think, "Oh, yeah. I wish more people did this. I wish more people engaged with me on the site. I'm going to re-engage." Again, not necessarily leading to direct links, but in some cases it will.

Just three more good ideas for you here. When you capture the email address, if possible in this box here, if you don't ask for location necessarily, you might later in a profile setup or completion step, you might get it through a credit card, but you can also get it through their IP address. When you capture an email address, capture that IP and Geotag it so that you know where those users are. The reason is when I go and visit Kansas City, I can say, "Hey, SEOmozers who are in Kansas City," shoot them an email, let's tell them I'm going to do a MozCation there. We're going to do an event there. I'm going to be speaking at an event there. It's a fantastic way to bring people from your community who already care about you back into the fold. Events are just a great way to earn natural links back to yourself, because you build relationships, people see you, and they just naturally link to you. You are engaging with them, you are contributing. Even if they can't make it to the event, sometimes you are going to get a link by them sharing it and saying, "Hey, by the way, so- and-so is coming to this." They'll put it on their blog. They'll link to it on a forum. They'll put it on their About page, whatever it is. They tweet about it. Great. Just a terrific way to interact and engage.

The second thing. This might be my favorite one on here. When you do this, when you go and you filter and you grab the domain name of all the people that you care about, and you've got that ordered, then go find those people's Twitter accounts, their blogs, their websites, and go engage with them socially. I promise you, if you are naturally, positively engaging on Twitter, in blog comments, on their Facebook Brand page, on their Google+ page, whatever it is, they are going to figure out who you are and remember you. They've already signed up for your email list, so they have a positive association with you and like what you do. You are going to earn a link sooner or later. It might be a month, might be six months, might be a year, but you are going to get that link through engagement. This is a wonderful way to just build your presence in raw inbound marketing, never mind just pure SEO.

Finally, Aaron Wheeler from the Moz team had this great idea to insert in your RSS feed, especially if you're running an RSS feed that's not powered by advertising but is content-driven, insert ads. You know how you've got an RSS feed and it looks something like this. Here's a piece of content, and then sometimes there will be a little block of advertising if it's a paid RSS feed and they want to sponsor it. Instead of advertising for a third party, encourage your own advertising. Encourage sharing of content. If you have a special piece of content in the RSS feed, you might say, "Hey, we'd really appreciate your help spreading this out over the Web. We're doing a subscription drive with a nonprofit. We're having an event somewhere. We are promoting a new service that we have. We have this new infographic that collects a bunch of data that we think a lot of people will love. Help us share it." Don't do it on every post or it will be ignored. Do it on every 7 posts, every 20 posts. Then you'll get attention and intrigue, because people who are subscribing to RSS via their email and getting those posts in email will see that little ad block and go, "Oh, maybe I should share that. That seems useful and interesting."

So you can see the wonderful power of collecting email addresses, building a great list, obviously for email marketing, but also getting some value back for SEO through the links that you can drive.

I hope you've enjoyed this edition of Whiteboard Friday. I hope you had a great Thanksgiving. We will see you again next week for another edition of Whiteboard Friday. Take care.

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Seth's Blog : When Google comes calling...

When Google comes calling...

In June of 2008, Google launched Knol, a monetizable Wikipedia, or, as some people saw it, a Squidoo killer. Not the same as what we were doing at Squidoo, not focused on individuals and their passions, but close enough for discomfort.

Our tiny team was in the headlights of a very big company.

One of the first things investors and advisors will say to someone launching a business, particularly a tech one, is, "sure, but what happens if Google/AT&T/Starbucks/Apple decides to get into your business? You'll be dead."

While the intent behind this question is generous, it's usually wrong. That's because it misses several fundamental elements of what allows a business to thrive, and how entrepreneurs often have a significant advantage over incumbents when they are building something new.

  • It's almost never about technology. Many companies that are built on tech believe that it's the tech that enabled them to succeed. This is almost never true (I know, I'm biased). It's marketing and stories and connection and tribes and commitment and structure that build businesses. The technology is essential, but it's not nearly enough.
  • First movers can become obsessed with external customers, not internal reports. We paid attention to Knol for about a week (who wouldn't?) but then ignored it. It wasn't relevant to our users, so it wasn't relevant to us. Our little team focused 100% of its energy on delighting our user base (which, while small at the time, was far bigger than Knol's). If you can give your users an experience that they want to tell their friends about, you'll grow.
  • There are no lifeboats. One of the reasons Google was so extraordinarily successful with search was that it was all they had. Sink or swim, those were the only options. Google's competitors a decade ago had tons of things to work on, plenty of sources of traffic and revenue. Google had only one. At the beginning, the founding team at Google came to work every day focused on just one problem. We were in the same position in 2008, and that's the case of most small companies facing down a big competitor. We focused because we had no plan B.

The most disruptive thing about the entrant of a huge player is the impact it has on partners. It's easy to get skittish when the 800 pound gorilla arrives. I'm not sure there's an obvious way to deal with this problem... we resigned ourselves to doing whatever we had to on our own, figuring the partners would figure it out eventually.

This week, three years after the launch, Google threw in the towel and closed down Knol. Our pageviews and our user base have grown by many multiples since 2008. I'm not sure you should wish for (or even plan for) a showdown with the big player, but it should give you solace to know that a focus on your tribe of customers gives you a fighting chance.

 

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West Wing Week: Your Best You

The White House Your Daily Snapshot for
Friday, Nov.25, 2011
 

West Wing Week: Your Best You

This week, the President wrapped up an 8 day tour demonstrating American leadership and opening up economic opportunity for America in the Asia Pacific region. Upon his return he signed legislation to help our veterans find jobs, traveled to New Hampshire to urge Congress to cut payroll taxes for workers and small businesses, and pardoned two turkeys.

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